With each passing week absent a new media rights deal for the Pac-12 Conference, already draped in gloom over the final league seasons for UCLA and USC, the tension grows among the West Coast citadels of big-time college football.
The question: Is the Pac-12 too big to fail?
The answer: No.
Fans of University of Washington and Washington State football, as well as the athletes, administrators and coaching staffs for all sports at the state’s biggest campuses, do not want to hear this. None of the financial travails are their fault. (Well, ex-UW football coach Jimmy Lake could stop taking his $10 million in salary owed after his firing, and ex-WSU coach Nick Rolovich could stop suing for wrongful termination over refusing to vaccinate against COVID-19; neither is happening).
But the state’s college sports enterprises likely will be rocked hard if new-ish Commissioner George Kliavkoff, an astute operator in the world of sports and entertainment and a big upgrade over his predecessor, Larry Scott, cannot execute his complicated routine and stick the landing. In addition to the financial blows to all schools from pandemic-related shutdowns, the Pac-12 negotiations with current TV partners such as ESPN and Fox, as well as NBC, CBS and streaming services such as Apple and Amazon, come at a time when many media partners are handing out layoffs and cutbacks.
Additionally, numerous platforms are dealing with the consequences of the union strike by writers that has cancelled numerous live-TV programs and forced postponements on decisions such as sports rights fees and new projects. Then there’s the abrupt arrival of AI and its potential influence on just about everything. The permutations on outcomes for big-time college sports are many.
What is knowable is that the other four Power 5 conferences (SEC, Big Ten, ACC, Big 12) concluded their latest rights extensions before much of this stuff hit the fan. It is a bad time to be last into a disrupted marketplace, particularly after the chaos of the new rules governing legal payments of private money to players (NIL) and the transfer portal. Two years into the job, the acumen of Kliavkoff, a former rower at Boston University who spent four years in Seattle in the ’90s as RealNetworks started up, is being sorely tested.
As media-rights dickering began the past winter, several university officials publicly anticipated a new deal would be struck around mid-March. Here it is mid-June, and nothing. The pending 2023 sports events, under the previous deal’s final year, will be unaffected. But all schools are deep into next year’s budget planning. If the new deal is only a little better than a wash with the previous terms — long deemed inadequate compared to the rest of the Power conferences — panic will be upon the western portion of the fruited plain.
Most worrisome is the fate of Colorado, which joined the Pac-12 in 2010 from the Big 12. Athletics department officials have acknowledged conversations with their old league about a return. In Deion “Prime Time” Sanders, the Buffs have one of pro sports’ greatest athletes as the new head football coach, meaning the local market there has gone as apoplectic as it did with the NFL Broncos’ acquisition last year of former Seahawks QB Russell Wilson.
We all saw how that worked out. But what if Sanders delivers? The transformation of woebegone Colorado suddenly would be the sort of eye candy likely to stand out more in the Big 12 than the Pac-12, which has several teams in big markets where college ball typically comes in as distant second to pro ball. If Colorado leaves, the Pac-12 is again destabilized following the abandonment by the Trojans and Bruins for the Big Ten.
Regardless of which schools the Pac-12 may poach from lesser conferences as replacements, the league undeniably would be diminished, and less attractive to in-house spectators and TV viewers. More immediately, the shrinking revenues already have caused UW athletics, according to Christian Caple of On Montlake, to seek approval from the Board of Regents to reduce the department’s $14 million annual payment on the 2014 stadium remodel to interest only (to $10.7 million).
Kicking the can of principal down the road, of course, has consequences. According to Mike Vorel of the Seattle Times, a variety of increased expenses and revenue shortfalls over the past several years have shrunk the department’s cash reserves from a pre-pandemic level in 2019 of $34.5 million to an estimated $9.5 million this year.
But at least UW has cash reserves. Over in Pullman, that’s as rare as an alcohol-free graduation party. Kip Hill of the Spokesman-Review reported that the athletics department requested $1.4 million from the institution to help cover an $11.5 million operating deficit in 2023, which will go up to $2.6 million in each of the next two years.
Operating deficits make the jock factory a bit of a ward of the state. Such situations prevail in many parts of the country, and are not new to Pullman. But the fact that UW, with much larger enrollment and athletics budget, is headed that way is a testament to the degree of difficulty in keeping a hot seat from becoming a four-alarm fire.
The Pac-12 chancellors and presidents recently agreed in principle to share all future media revenues equally, regardless of school size. Which is good, but since each joint has different debt loads and other revenue streams, nothing else is equal and thus hard to manage harmoniously. Never forget: Pro sports leagues are monopolies, college sports are not. The agreement remains unsigned, awaiting baker Kliavkoff’s pie before making slices.
Given the problems over time — refusal of the NCAA to engage in meaningful reform, courtroom decisions ending amateurism, increased business powers of conferences, the pandemic, abrupt innovations in technology and changing consumer tastes — there is little surprise the industry appears to be Everything Everywhere All at Once.
Too bad the 2022 Oscar winner for best picture got away with stealing the name. Seems that as far as the entertainment-industry game, big-time universities are a step slow.
Coming to a theater near you, sooner than you think: A 48-team super league, owned by a company that rents the team colors and fight songs.
Art: Why doesn’t the University of Washington just withdraw from the NCAA altogether and refocus its energies and resources on education? Sure, there would be lots of dollars lost but those moneys don’t advance traditional education, only pour unseemly money into bloated athletic departments with equipment and facilities lab scientists would kill for, and salaries never dreamed of by educators, not to mention distorting the already difficult academic student selection process. Health of students can be supported by intramural sports without the commercial effects introduced by television contracts.
If the community is unwilling to pay the cost of quality education so that additional funds from academically irrelevant commercial activities is thought necessary, why not just open a casino? That could provide funds without in so many ways distorting the university’s important educational mission.
Overall the UW athletic programs is among the best in the nation. There’s no need for such a drastic action and would be unfair to the student athletes in all sports as well as take away needed revenue and national recognition.
I doubt that abandonment is realistic, John. But big-time college sports is upon a reckoning previously unknown. UW is not alone is this, but West Coast college football may be the most disrupted because fewer fans per capita care about football compared to the Midwest and South.
I believe the athletic departments of NCAA schools are funded separately from the general university operations. So, the football team isn’t taking away money from the Humanities department per se.
Would that we lived in your perfect world, Kirkland. In fact, UW athletics has been self-sustaining for a number of years, but fewer programs are likely to maintain that in the new era. We are nearly at the breaking point between the haves (UW and U of Oregon, for example) and the have-nots (Washington State and Oregon State). Gird your grid self for 52-card pickup.
Husky Casino? Now there’s an idea I can get behind, Bill. A legal grift playing on human weakness. What more underscores the worthiness of higher ed?
More seriously, big-time sport is a major marketing tool for many universities big and small. The best business example is in our state: Gonzaga men’s basketball. Because of its consistent success, many people nationally now know the program and Spokane who otherwise would have been oblivious. Enrollment and endowments are way up. That success level is rare. But UW’s profile has been enhanced for more than a century by football. Yes, it’s hood ornaments and leather seats compared to the engine, but logic rarely make sales. Emotions do.
UW also is among the two dozen or so big-timers whose athletic program is self-sustaining. Your argument works better in Pullman.
If the PAC 12 wants to keep up with the Joneses and stay relevant they need to pursue a deal like what fell apart some years ago with Oklahoma and Texas. Both declined to join the PAC-10 because they didn’t want to participate in revenue sharing. If they can’t have a comparable deal take place they’ll be lucky to have San Diego State and Boise State join and will never recruit the best athletes for any sport.
As I wrote, the Pac-12 bosses recently agreed to split revs equally. A very democratic way of thinking. But TX and OK are very republican — everyone for themselves. So you see, John, sports are just like life.
College sports, especially football.The NIL and “transfer portal” will be the downfall, especially for smaller D-1 schools like WSU that are financially hard pressed under the best of circumstances.
You have cited the final consequences that will doom parts of college football, Jim, but the cause of any financial death is years-long failure to reform the business model. Think of it as a patient who feigns shock at his doctor for bad health news after a lifetime of scotch, cigarettes and ice cream.